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Early this morning, the 109th Congress adjourned for the year leaving a number of issues unresolved, including FY 2007 spending bills covering all domestic agencies, including mental illness research and services, as well as veterans and housing programs. When the new Congress convenes in January, it will be forced to complete work on these 9 separate spending bills for the current fiscal year, as early as February 15.

In the final days of this year’s session, Congress did act on a massive $45.1 billion package that includes extension of popular tax breaks, trade bills, energy legislation and health provisions. Among provisions in this package are extension of the 1996 mental health parity bill and technical corrections to the Deficit Reduction Act that was enacted earlier this year. The package passed the House yesterday by a vote of 367-45. It now goes on to the White House where the President is expected sign it into law.

FY 2007 Spending Bills Still Not Complete

As noted above, the just concluded "lame duck" congressional session failed to address spending bills for the current fiscal year that began back on October 1. Instead, Congress passed a "continuing resolution" that will keep most federal agencies and programs operating close to current FY 2006 levels through February 15, 2007. This means that most federal agencies – including the National Institute of Mental Health (NIMH), the Substance Abuse and Mental Health Services Administration (SAMHSA) and the Department of Veterans’ Affairs – will have been operating under their FY 2006 budgets for nearly 5 months into FY 2007.

For the current continuing resolution, no growth is allowed above 2006 levels and any spending cuts acted on by the House this past summer as part of deliberations on the FY 2007 spending bills will prevail through February 15. For NIMH, this means that the agency will have to operate as if the President’s proposal for a $9 million cut is in effect (i.e., a budget of $1.395 billion). More importantly, this uncertainty of operating under a continuing resolution makes it very difficult for the NIMH to make decisions regarding new extramural research grants.

Veterans’ medical care will be profoundly impacted by having to operate under their FY 2006 budget for an additional 2 months. Unlike NIMH and SAMHSA, veterans’ medical care is slated for a $3.1 billion increase for FY 2007 in spending bills that had passed the House and Senate, but did not reach the President’s desk prior to adjournment. Instead, a provision was added to the continuing resolution granting the VA the authority to transfer up to $684 million from other accounts to deal with any shortfall in medical care funding.

Other programs that were expected to get increases for FY 2007 – and will not, at least until later in 2007 – are the HUD McKinney-Vento Homeless Assistance Act (a $209 million boost, up to $1.511 billion) and an $8.7 million increase for youth suicide prevention programs under the Garrett Lee Smith Act (up to $40 million).

1996 Parity Law Renewed

As noted above, the massive tax and trade package includes a 1-year renewal of the 1996 Mental Health Parity Act. This law requires parity (i.e. equity between mental health and physical health) for annual and lifetime dollar limits in health insurance plans. Beyond renewal of the 1996 law, the sponsors of full parity legislation (requiring equitable coverage with respect to cost sharing, deductibles and limits on inpatient days and outpatient visits) remain committed to pushing legislation in 2007.

Other Health Provisions

The final omnibus tax and health package that cleared the House and Senate late yesterday also included a provision that would prevent a 5% drop in the Medicare physician fee schedule that would have occurred in January. The provision included in the package would freeze payment rates for physician services in 2007 and creates a 1.5% bonus for physicians who report quality measures.

The package also includes technical corrections to the Deficit Reduction Act (DRA) that was enacted earlier this year and includes new flexibility for states to amend Medicaid to set up alternative benefit packages and impose higher cost sharing on prescription drugs and other services. With respect to Medicaid, the package extends the authority of states to use provider taxes to finance their programs (lowering allowable rates from 6% to 5.5%). In addition, the package includes an extension of the Transitional Medicare Assistance (TMA) for families moving from TANF to work.

However, a proposal to allocate additional funding for the State Childrens’ Health Insurance Program (SCHIP) for states that are currently experiencing shortfalls in their programs was dropped from the package at the last minute. Instead, the new Congress will be taking up the issue of SCHIP shortfalls at the state level next year as part of legislation to reauthorize the program.

Finally, on December 7 the House and Senate cleared legislation to further research, screening, intervention and education on autism. The bill (S 843) now goes onto the White House where the President is expected to sign it into law. The bill authorizes $500 million for at autism research at NIH over 5 years ($68 million for 2007, $82 million for 2008, $96 million for 2009, $120 million for 2010 and $134 million for 2011) and $195 million for funding the Autism Centers of Excellence over 5 years ($26 million for 2007, $32.5 million for 2008, $38 million for 2009, $45.5 million for 2010, $52 million for 2011). S 843 also reauthorizes CDC's epidemiologic surveillance programs and establishes regional Centers of Excellence for collection, analysis and reporting of epidemiological data on autism spectrum disorder and other developmental disabilities.

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